Bank’s offer failed to reflect full extent of stress caused by settlement statement failings

Categories:

Service problems, Delays, Lending,

Summary:

Joseph had an unconditional contract to buy a property, the settlement date for which was 17 April 2025. However, settlement was delayed because the bank failed to send him a final settlement statement in time (he was switching to another bank at the same time). The delay happened despite Joseph having given the bank three business days' notice of his need for the statement. When the bank eventually issued the statement five days later, it incorrectly included a loan of $70,000 that belonged to Joseph's parents. This caused significant stress for Joseph and his wife Eileen, who feared incurring penalty interest and legal fees, and even bankruptcy.

Published:

December 2025

The bank acknowledged its error in providing a delayed and incorrect settlement statement. It reimbursed Joseph for the penalty interest and legal fees he had incurred, as well as offering $1,000 in recognition of the stress and inconvenience the couple had suffered.

Our investigation

We found the bank breached its duty to exercise reasonable care and skill by failing to prepare an accurate settlement statement and by failing to supply it in time. The bank reimbursed Joseph for all direct financial losses suffered as a result of its failings (totalling $2,400). However, we also found that the stress and inconvenience the couple suffered was short-lived but nonetheless significant. In addition, Joseph experienced frustration over repeatedly receiving his parents' personal loan information (and the bank took a considerable length of time to explain why this kept happening).

We recommended that the bank pay Joseph $1,500 for stress and inconvenience, rather than the $1,000 initially offered.